Class 1 quiz ONE - FIN 500

What is the accounting equation that expresses the relationship among elements of the balance sheet?

• Liabilities = Assets - Stockholders' Equity

• Assets + Liabilities = Stockholders' Equity

• Liabilities = Assets + Stockholders' Equity

• Stockholders' Equity = Assets + Liabilities

Which of the following is considered a current asset?

• Land

• Accounts Receivable

• Buildings

• Marketable Securities

What type of activities do cash flows from operating activities include?

• Cash effects of events that enter into the determination of net income

• Cash effects like Sale of property, plant, and equipment

• Cash effects like Sale of equity securities

• Cash effects like Lending and collecting money

Which of the following is NOT a category of current assets?

• Accounts Payable

• Inventories

• Marketable Securities

• Cash

What is the primary purpose of the income statement?

• To summarize cash flows

• To show financial condition at a specific date

• To summarize revenues and expenses

• To determine dividend policy

Which of the following describes long-term assets?

• Assets that are always physical

• Assets that will be realized in cash within one year

• Assets that are not subject to depreciation

• Assets that take longer than one year to convert to cash

What is the purpose of common size analysis in financial analysis?

• To assess the profitability of a company

• To evaluate the liquidity of a company

• To compare financial statements of different companies

• To analyze the market value of a company

Which of the following is a cash inflow from investing activities?

• Sale of equity securities

• Receipts from loans collected

• Cash outflows for acquisitions of inventory

• Payment of dividends